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Postseason Expansion: Good or Bad…or both?

Adjusting to a new schedule hence the lack of posts over the past week. I think I’ve got a routine down, but will wait for confirmation before announcing a rough schedule. There’s still a lot to do regarding a review of last season, then we’ll need to look towards the draft and free agency.

First, though, playoff expansion. Roger Goodell mentioned recently (two weeks ago I believe), that the league is seriously considering adding a wild card spot to both conferences. That would allow 7 teams to make the playoffs, with the #1 seed in both conferences having the only first round byes.

My initial reaction: Terrible idea.

However, as is usually the case, a deeper analysis made things a bit more complicated. So, let’s first talk about why adding a 7th team would be a good idea, then we can look at why it’s a bad idea.

Good Idea

From a business standpoint, two additional playoff games mean the league can sell another TV package. Brian Solomon (@Brian_Solomon), a Forbes markets reporter, mentioned to me on Twitter that this could be worth around $1 Billion. Obviously, that’s a relatively big deal. Beyond that, adding an additional team means the #2 seed gets to host an additional playoff game. I’m not sure what owners would say publicly about this, but there’s no doubt they love the idea of another playoff game’s gate revenue.

From a fan’s perspective, it’s hard to find fault with an additional playoff spot. Beyond the initial negative reaction, largely derived from some abstract notion of what the playoffs “should” be or which teams “deserve” to be there, an additional game likely adds to the overall enjoyment level for fans. Each team has an increased chance of making the playoffs. Also, the bar for making the playoffs is lowered, meaning late season games will “mean” more for mediocre teams. That makes those games more entertaining. Additionally, how many non-Eagles playoff games did you watch? My guess is a lot. Presumably you did so because you enjoyed them. So it’s safe to assume you’ll derive added enjoyment from an addition 2 playoff games, even if the Eagles aren’t involved.

What about quality? Won’t lowering the bar to the playoffs just result in bad teams getting in? Maybe, but not as much as you’d think (or I thought before doing the research). Here’s a table showing which teams would have been added to the playoff field over the past 5 seasons if there had been a 7th spot in each conference:

There’s definitely some mediocrity in there; I can’t say I’d be excited to see the 2011 Bears in the Playoffs. However, there are also some legitimately good teams, whose addition clearly adds to the overall quality. Look at the 2012 Bears or the 2010 Chargers; in either case, it’s hard to argue those teams don’t “belong” or that they somehow compromise the overall quality of the playoff tournament.

It seems that the only real complaints about an added team, from a fan’s perspective, will be from the #2 seed. That team loses its bye, and as I showed above, has to play another game, perhaps against a very good opponent. However, as I said above, it’s a home game. For all of the live attendees, another home game seems like a net benefit. For fans at home, it’s just another opportunity to watch their favorite team play. Yes, it hurts their chances of winning the Super Bowl. However, if the team can’t beat the #7 seed in a home playoff game….

So…pretty clearly, the addition of a 7th team is probably net benefit to all those involved (except maybe the players). However, we do need to discuss the negatives, some of which are obvious (and minor) and some of which are relatively abstract (and potentially significant).

Bad Idea

Let’s get the easy one out of the way first.

– Injuries. Any additional game increases the chances that a player will get injured. This is a major argument against the expansion of the regular season. However, this change results in just 2 added games. Again, this negative result seems to be focused on the #2 seed in each conference. None of the other teams are effected, and the #7 seed will gladly take the risk of injury in exchange for a spot in the playoffs. This is a legitimate gripe, but doesn’t have anywhere near enough significance to outweigh the benefits.

Now we need to ascend to a higher level of analysis. As we’ll see, the reason the playoff field will expand is because the benefits are mostly clear and quantifiable ($$$) and the detriments are largely abstract and qualitative. In such a scenario, a near-term focused business enterprise (as the NFL appears to be) will always choose the $$$.

Since the NFL’s decision-making is based entirely upon the fact that it is itself a business and operates for the benefit of other businesses (the teams), any argument against playoff expansion has to focus on the business side of things. We can complain all we want from a fan’s perspective, but unless it affects the bottom line, it doesn’t matter.

So…here are a few points, which by themselves do not pose significant risks. However, after I list them, I’ll try to tie them together to explain why I’d be more cautions than the NFL in expanding the playoffs.

– Super Bowl quality. The premier event of the NFL season is the Super Bowl. Recently, the NFL has benefitted tremendously from the competitiveness of the game. Viewership is huge and therefore the value of that entity is extremely high. However, adding a playoff team affects the probability of producing a good game. This is a long-term concern. At the moment, the Super Bowl is a huge cultural event, drawing in casual viewers who don’t really care what the involved teams’ records were. However, I’d argue that the casual viewership is, at its core, built from a foundation of more interested fans. Those are the one’s most likely to be effected, over the long-term, by a diminution in the general competitiveness of the game.

Look back to the Super Bowls of the mid-late 80’s:

1985 – 49ers 38, Dolphins 16

1986 – Bears 46 – Patriots 10

1987 – Giants 39 – Broncos 20

1988 – Redskins 42 – Broncos 10

1989 – 49ers 20, Bengals 16

1990 – 49ers 55, Broncos 10

That’s what the NFL should be worried about. Adding mediocre teams may effect the general competitiveness of the games. Of course, the counterargument is that the overall parity of the league has shifted such that mismatches won’t happen like they did in the past. That’s a fair point, but it’s not dispositive. We’re just looking at possible risks. Again, this is a relatively small risk, and something that would take a while to develop. One bad Super Bowl isn’t going to change the NFL’s value much. It would take a string of such games to really result in a decline in general interest, and even then, the resulting value effects are unclear. However, just because a the probability of a risk is small doesn’t mean it should be ignored.

– Piercing the veil of “the event”. 3 of 4 Wild Card games this year had trouble selling out. In fact, those games would not have sold all of their tickets had it not been for corporate sponsors willing to take large swaths of seats off the teams’ hands. Although it’s unlikely that a #2 seed would have as much difficult selling tickets as the teams this year did, it’s indisputable that added games increase the probability of a failure to sell out.

Ok, so what? Why is this a problem?

Well similar to the SB discussion above, the NFL has built its tremendous popularity by convincing the general public that each game is an “event” that shouldn’t be missed. The structure of the season (just 16 games, 1 game a week, typically on Sundays) helps as well. I submit that if the games ceased to sell-out, the foundation of the “event” would begin to erode. Right now the NFL has a LOT of casual fans; fans who don’t really follow the team but still tune in every Sunday. Why? Because it seems culturally important. It’s the same thing that drives street performers. If you walk by one on an empty street, you’re unlikely to stop and watch/give money. However, if you see one surrounded by a large crowd, you’re going to want to see what’s going on, right? Apply similar logic to the NFL games.

It’s important not because of any intrinsic value but because so many other people think it’s important. The casual fans don’t want to miss out. However, if the games can’t even sell all of their tickets, how could it possibly be that important?

Once again, this is a long-term, relatively abstract risk. One empty seat isn’t going to effect TV viewership. However, consistent blocks of empty seats might.

Intermission

Just realized that I’ve hit 1500 words and am running out of time, so I’ll provide a temporary wrap up, and we can continue the analysis later.

There is no law that says the NFL has to remain tremendously valuable. It seems inconceivable that it won’t, but large, seemingly stable businesses do collapse, and it’s likely often not the result of what were obvious defects (if they were obvious they’d have been addressed). This needs a lot of unpacking, but for now, let’s just say that if I was the NFL, I’d be very careful about reaching for limited, near-term gains ($1 Billion split between every team is not a huge gain compared to overall value) in exchange for taking on long-term, qualitative tail risk. What I identified above (along with other similar issues) is hard to quantify (think about general product dilution). However, that’s precisely why you shouldn’t be too cavalier in inviting it. Individually, the potential negative effects are all likely to be small and to only manifest themselves over the long-term. But they are also very tough to eliminate/address, and once they take effect, it’s hard to combat.

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5 thoughts on “Postseason Expansion: Good or Bad…or both?”

I have no vested interested either way in this debate, but it’s always anticlimactic in hockey when over half of the teams in the league make the playoffs. This would be nowhere near that, but it should always be difficult to make the postseason, or the regular season has no point.

While we’re on the subject of making changes to the format of the season, my opinion is that the best thing they could do is add a second bye week. The league wants to lengthen the season to gain additional revenues, and the players don’t to minimize injuries. This seems like the perfect compromise. With current TV agreements, they can only air 6 games per week in any market (1 on Thursday night, 3 on Sunday afternoon, 1 Sunday night, and 1 on Monday night). This is true regardless of the home team playing or not. With that being the case, the sponsors won’t care if they’re losing a game per week because they really haven’t–airing 6 of 14 games is no different to them than airing 6 of 12 games. Clearly the ratings aren’t as high when the home team isn’t playing, but there will still be the normal 16 games per team revenue, plus an extra week of bye week revenue. Not to mention that in a league built on star power, it gives more time for injured stars to find their way back to the field.

Now 1 team each might not be a huge deal but as is pointed out I worry about shifting too much focus from the regular season to the post season a la hockey or the nba. I personally think part of hockey’s problems is an exceptionally grueling regular season. I like hockey but really I hardly bother with the regular season I know most of the teams will get in. Playoff hockey is awesome though.

I’m the same way with basketball. Now basketball trumps hockey in everyway(as far as notoriety ) even though it has a similar structure to hockey. I think that’s mostly due to basketballs simplicity. Near every single person at some point has made a basketball shot even if it’s with their socks and a hamper. Basketball is easily accessible in spite of its drudging regular season. Playoffs in basketball are also awesome. Those two sports are good examples of what not to do. Teams are always moving around truism g to find cities that will sell out their 44 home games. Mostly because fans know that gage regular season doesn’t matter. Now so long as the nfl doesn’t do this in an effort to. Expand hrs regular season. Fine. I worry that might be the case though

Think about how difficult it would be for that #7 seed to make the Super Bowl for a second. They would have to beat the #2 seed on the road in the wildcard round. Then they would have to beat the #1 seed on the road in the divisional round. Then they would have to beat the best remaining playoff contender (whoever remained from the #3 through #6 side of the tree) on the road in the conference championship game.

The Steelers would need to knock off the Patriots and the Broncos both on the road before they even got to the conference championship game.